Oil futures leaped on Wednesday, June 28, to their highest in more than a week despite a surprise build in crude inventories, as buyers were encouraged by a small weekly decrease in U.S. production.
Brent LCOc1 futures were up 55 cents, or 1.2 percent at $47.20 a barrel by 11:28 a.m. EDT (1528 GMT). U.S. West Texas Intermediate crude CLc1 was up 44 cents, or 1 percent, at $44.68 per barrel.
The U.S. Energy Information Administration (EIA) said crude stocks rose by 118,000 barrels during the week ended June 23, while weekly production declined by 100,000 barrels per day (bpd) to 9.3 bpd.
“Most interesting thing is crude oil production was down … which is a significant decline given the increases in previous weeks,” Andrew Lipow, president of Lipow Oil Associates in Houston, said. Lipow said production was most likely pressured by a storm in the Gulf of Mexico last week.
Also, the production decline came after U.S. output reached almost 9.4 million bpd during the prior week, the most since August 2015.
That was the highest since June 19 for both contracts, which are on track for a fifth straight day of gains for the first time since mid May. Both contracts were up about 5 percent since June 21 when Brent fell to a seven-month low of $44.35 and U.S. fell to a 10-month low of $42.05.
Oil rose after the EIA’s weekly inventory report, even though data showed a build instead of the 2.6 million barrel draw that analysts had forecast in a Reuters poll.
